Preserving GM plant spurs action
Oklahoma Gov. Brad Henry wants to personally meet with General Motors Corp. officials to see what needs to be done to preserve the company's Oklahoma manufacturing plant.
"We want to know what we can do," Henry spokesman Paul Sund said Friday. "We are more than willing to do whatever we can to ensure that the operation continues to thrive and grow in Oklahoma."
Kathy Taylor, Oklahoma secretary of commerce and tourism, said the state had a good relationship with the plant and regular contact prior to this week's announcement that GM would close plants across the country. Now the state has to wait and see what the manufacturer will do next and what criteria will be applied in deciding which plants to keep and which ones to close, she said.
"We are in constant communication with the plant here," Taylor said. "I am confident Detroit knows that we want to keep the plant."
Concern about the relationship and the plant's future arose when the automaker's chairman and chief executive told shareholders Tuesday that GM plans to close plants and eliminate 25,000 manufacturing jobs in the United States by 2008 to generate annual savings of roughly $2.5 billion. About one out of six GM jobs in the United States would be eliminated.
Speaking at the company's annual general meeting, GM Chairman and CEO Rick Wagoner wouldn't say which plants might close. GM spokeswoman Nancy Sarpolis said Friday the company continued working on criteria for which plants to close, but no timetable has been set for when that criteria would be available.
"These things take planning and thought," Sarpolis said. "We are still working."
General Motors manufactures a line of SUVs at its Oklahoma City plant. The company employs 2,600, making GM the third-largest manufacturer in the state, according to data from the Oklahoma Department of Commerce. The company trails the 3,300 at Goodyear in Lawton and the 3,100 at ConocoPhillips in Bartlesville and Ponca City.
In 2002, a $750 million project converted the plant from production of passenger cars to the mid-sized SUVs it produces now.
State leaders recognized the critical need to keep manufacturers, like GM, Taylor said, and acted in the most recent session to preserve such businesses. The state worked to control costs, create a good business environment, improve education through a $500 million bond issue and, most importantly, fix its workers' compensation system, Taylor said.
"We looked at the industry in the state. We knew this workers' comp legislation would effect the largest employers and small business," Taylor said. "We have done what we can do."
It is too soon to say what else the state might do, Taylor said. The GM plant already qualifies for a number of incentive programs, including the Quality Jobs program that returns some taxes to companies for high-paying job creation.
After a tornado ripped through the plant on May 8, 2003, tearing off the plant's west wall and heavily damaging a paint shop, body shop, powerhouse and cooling towers, the state aided GM in rebuilding. The state provided an exemption on sales tax for the building material used to repair the plant.
Oklahoma also reached out to General Motors when the company announced April 5 that it would eliminate a shift in Oklahoma City that would have effected about 830 jobs. However, that scheduled shift reduction was postponed later that month based on an updated report on market demand for the SUVs.
Market demand is the one factor that should not be ignored, GM's Sarpolis said. The demand for the Chevrolet Trailblazer EXT, GMC Envoy XL and the GMC Envoy Denali XL, all produced in Oklahoma City, could be important in determining any plant's fate, Sarpolis said.
GM posted a $1.1 billion loss in the first quarter and its U.S. market share has fallen to 25.4 percent from 27 percent a year ago, as customers increasingly are choosing models from Toyota Motor Corp., Nissan Motor Co. and other Asian automakers.
"The one think that a lot of people are forgetting but is going to be a huge factor is market conditions and sales," Sarpolis said. "Everyone is focused on quality, productivity, safety and efficiency.
"A huge factor is going to be the market and where it goes."